Finance ministers of Japan and South Korea agree to resume currency swap agreement as ties warm Japan and South Korea

 Japanese Finance Minister Shunichi Suzuki announced the agreement after meeting with his South Korean counterpart, Choo Kyungho. It was the first time the
two countries have held annual financial talks in seven years, though Suzuki and Choo also met in South Korea in May.Suzuki told reporters that the 3-year currency swap agreement would help reinforce trust in the financial stability of the two countries as a fallback in an emergency. But he emphasised that Japan is fully prepared to deal with fluctuations in the Japanese yen, which has weakened sharply against the US dollar in the past year.

  Economy and Finance Minister Choo Kyungho shake hands 

The USD 10 billion swap arrangement expired in 2015 and had not been renewed. Largely symbolic, it allows the South Korean and Japanese central banks to exchange currencies for each country’s reserves of US dollars to provide extra liquidity, or cash supplies, in case of a crisis. The two major Asian economies, both US allies, have recently mended ties as they contend with challenges posed by China and North Korea, despite tensions over issues left over from Japan’s 35-year occupation of the Korean Peninsula before and during World War prostitution in military brothels before and 

Japan’s tightening of trade controls against Seoul was in apparent retaliation for South Korean court rulings in 2018 that ordered Japanese companies to compensate Korean workers for abusive treatment and forced labour during World War II. Japan also tightened export controls on key chemicals used by South Korean companies to make semiconductors and displays, prompting South Korea to file a complaint with the World Trade Organisation and remove Japan from its own list of countries with preferred trade status.